What is profit margin?

The percentage of revenue that is profit. Formula: (Revenue − Cost) / Revenue × 100. A $100 sale with $60 cost = 40% margin.

What is the difference between margin and markup?

Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. With $60 cost and $100 revenue: margin = 40%, markup = 66.7%.

It varies by industry. Retail: 2–5%. Software/SaaS: 60–80%. Restaurants: 3–9%. Services: 15–40%.

No. Margin approaches 100% as cost approaches zero, but can never reach it. Markup, however, can be any percentage above 0%.

Calculators

Calculate profit margin and markup from cost and selling price. Essential for pricing products, freelancing rates, and business planning.

Cost ($)Selling Price ($)

Profit

$40.00

Margin

40.00%

Markup

66.67%

Profit margin = (Revenue − Cost) / Revenue × 100. It shows what percentage of sales is profit.
Markup = (Revenue − Cost) / Cost × 100. It shows how much you added on top of cost.
A 50% margin is not the same as a 50% markup. 50% margin = 100% markup.

What is profit margin?: The percentage of revenue that is profit. Formula: (Revenue − Cost) / Revenue × 100. A $100 sale with $60 cost = 40% margin.
What is the difference between margin and markup?: Margin is profit as a percentage of revenue. Markup is profit as a percentage of cost. With $60 cost and $100 revenue: margin = 40%, markup = 66.7%.
What is a good profit margin?: It varies by industry. Retail: 2–5%. Software/SaaS: 60–80%. Restaurants: 3–9%. Services: 15–40%.
Can margin exceed 100%?: No. Margin approaches 100% as cost approaches zero, but can never reach it. Markup, however, can be any percentage above 0%.